Altcoins might be in for a real test.
On the charts, most high-cap coins are sticking close to key support levels, and the Altcoin Season Index (ASI) hasn’t budged much, showing that the ongoing fear, doubt, and uncertainty haven’t pushed money into altcoins.
Aave [AAVE] is bucking that trend. It gained 7.5% on the 2nd of March, making it one of the top performers, and is now creeping toward the $120–$130 zone, a range it hasn’t managed to break since early February.
Naturally, the question arises: Will it finally push through?
According to AMBCrypto, AAVE’s rally to the $120 resistance last week turned into a bull trap. Momentum lacked follow-through, triggering liquidations of long positions as the market moved against traders’ bets.
Adding to the caution, capital rotation into altcoins remains muted despite ongoing FUD. Instead, smart money exited their positions, with one investor depositing 42.5k AAVE tokens in just the past 10 hours alone.
Consequently, the setup suggests the altcoin may be forming yet another bull trap. With smart money exiting positions and capital rotation into altcoins remaining muted, a breakout past $130 looks difficult to sustain.
This raises the question: Is AAVE’s 7%+ rally merely short-term momentum, or could the recent approval of a major governance vote create a divergence strong enough to decouple it from the broader market?
AAVE’s rally fueled further
Technically, every network needs capital to sustain long-term growth.
Notably, AAVE is following this trend with its “Will Win” proposal. After passing its first governance vote, $42.5 million will be allocated to fund Aave Labs, with all revenue flowing back to the DAO treasury.
This comes at a pivotal moment. On-chain momentum is strong, and Santiment recently ranked AAVE as the second-most active project by development.
In this context, the $42.5 million approval positions Aave Labs to further accelerate development.
Meanwhile, on-chain accumulation reinforces the trend. One analyst noted that the monthly average of the top 10 Binance outflows increased from 147 to 232 AAVE, indicating rising investor confidence.
Taken together, this accumulation, along with a development-focused roadmap and $42.5 million in funding for Aave Labs.
This makes AAVE’s 7% rally more strategic than purely speculative, lowering the risk of another bull trap below $120 and allowing it to decouple from broader altcoin trends.
AAVE’s breakout past $130 looks likely and could arrive sooner than many expect.
Final Summary
- AAVE is nearing the $120–$130 zone, supported by on-chain accumulation and smart-money activity, reducing the risk of another bull trap.
- The “Will Win” proposal accelerates Aave Labs development, positioning the altcoin for a potential breakout past $130.
